9 ms·

I think of prop 13 as rent stabilization for a thing you've actually bought. If you buy a new $1.5M home around here, you're paying around $19K (1.25%) per year

by imh 8y ago

I think of prop 13 as rent stabilization for a thing you've actually bought. If you buy a new $1.5M home around here, you're paying around $19K (1.25%) per year to the government in taxes. It's almost $1600 / month in taxes alone. I'd imagine a ton of the people who bought at $500k can't afford $1600/mo on top of their mortgages. If I offer you a ton of money to buy your house, you can accept that or reject it. Rejecting it is a fine choice. But you still have to pay higher "rent" to the government just because I'm willing to buy your house for a lot? It's nice to stabilize people's homes against the market.

xyzzyz 8y ago
I'd imagine a ton of the people who bought at $500k can't afford $1600/mo on top of their mortgages. I wish I had a problem like this — I could just sell the house, cash in the profit and retire...
- eanzenberg 8y ago
  There's plenty of people that don't want to do that or can't due to poor and ailing health, and convenience to where they live. Kind of interesting there are those who want certain people kicked out of the area (elderly homeowners) but not others (homeless).
  - s0rce 8y ago
    Offer a tax credit to elderly or disabled if absolutely needed. Don't fix rate increases across the board and for corporations.
  - xyzzyz 8y ago
    There are plenty of people of poor and ailing health, who don’t even have an option to do that, because they are paying high rents due to policies that protect homeowners’ profit. I don’t want to kick anyone out of the area, but I don’t think people who made a million of dollars (in the example above) are the ones who need the protection the most.
    - eanzenberg 8y ago
      Consider many homeless move here (SF) because of how lucrative panhandling is, along with other services. Numerous elderly have trouble moving due to their poor health. Forcing them to sell is akin to an early death sentence.
      - xyzzyz 8y ago
        They can mortgage their houses to pay the property tax. Having >$1M of accumulated wealth can help with many problems, you know. I’m not sure why you keep talking about homeless though.
  - toasterlovin 8y ago
    If the choice is between the older generation having to relocate and young people trying to start families having to relocate, I am very much of the opinion that the older folks should take one for the team.
JamesBarney 8y ago
I'm in Texas where property taxes are ~3%. We just calculate that as part of the owning the home. Right now my mortgage and property taxes are the same. The way I look at it, if you can't afford the taxes you can't afford house.
- imh 8y ago
  If your property taxes were 10x what they were 20 years ago, would you still be able to afford it? Rr if they 10x in the next 20 years? That's what happened to the first San Francisco home I looked up on redfin to ballpark figures for.
  - landryraccoon 8y ago
    You're pointing out another really bad side effect of Prop 13. Local communities have less tax incentive to allow higher density, since property taxes are capped. On the other hand, they are strongly incentivized to overbuild office space and retail, since they can increase sales taxes. In other words, if Prop 13 were repealed, communities would have more reason to allow housing construction (since the resulting housing could be taxed more). The result of your policy is not only increased cost of housing and underdevelopment, but higher sales taxes as well. If California had a more healthy proportion of property taxes, then sales taxes wouldn't be forced up to nearly 10% to fund government.
    - toast0 8y ago
      If you turn a single family home into 10 condos, you'll probably get a bigger combined assessment, and also more frequent turnover. Prop 13 actually would encourage this. If your turn it into apartments though, you've probably eliminated turnover, since it's much easier to own apartments through corporate forms that won't trigger a reassessment.
  - JamesBarney 8y ago
    No but I'd be 3 million dollars richer, which is a fair trade off.
bryanlarsen 8y ago
"I'd imagine a ton of the people who bought at $500k can't afford $1600/mo on top of their mortgages." If you have $1M in capital in your $1.5M house, banks will be begging you to take out a reverse mortgage to pay your taxes. It just means that your heirs will get a slightly smaller windfall from your death rather than the full $1M.
opportune 8y ago
Yeah but it’s extremely unfair to young people who want to buy homes and don’t have luck of coming from a family with a house locked into a low tax rate. Your “stabilization” is everyone else’s inability to buy a house None of this would be a problem if the proposition had been sane. They could have just allowed primary home owners over a certain age (59.5, 65, etc) to have locked-in property taxes. The bullshit is that the “stabilization” applies to corporations with indefinite lifespans, and that the tax rates can be inherited. By corporations we’re not just talking big, actual business like Google. The way the proposition works incentivizes real estate funds to simply buy all the land they can as soon as possible to lock in a low rate that can be maintained indefinitely. This brings housing prices further up and disincentivizes actual land ownership over the long term (it makes it cheaper to rent from a group that structurally locked in a stupid low property tax rate). It’s such a stupid fucking law. Clearly nobody bothered to think of the long term consequences
- wedn3sday 8y ago
  I disagree, I think large groups of highly paid lawyers spent a great deal of time looking at the long term consequences and got the legislature to do exactly what their CEOs wanted.
  - opportune 8y ago
    Proposition 13 passed by referendum. However I do agree with the general sentiment: it was probably easy for interest groups to rally behind senior citizens to their own benefits
southphillyman 8y ago
This is basically how gentrification pushes long time residents out (as I understand it). I experienced the shock of this first hand recently as my taxes increased by $1500+ in a single year after a recent reassessment in my city. The prop 13 issue seems pretty nuanced but a component of it is certainly helpful to low income long time residents.
- toasterlovin 8y ago
  Increases in property taxes are, by definition, subsidized by an proportional increase in wealth.

by imh 8y ago

xyzzyz 8y ago

I'd imagine a ton of the people who bought at $500k can't afford $1600/mo on top of their mortgages. I wish I had a problem like this — I could just sell the house, cash in the profit and retire...

eanzenberg 8y ago
There's plenty of people that don't want to do that or can't due to poor and ailing health, and convenience to where they live. Kind of interesting there are those who want certain people kicked out of the area (elderly homeowners) but not others (homeless).
- s0rce 8y ago
  Offer a tax credit to elderly or disabled if absolutely needed. Don't fix rate increases across the board and for corporations.
- xyzzyz 8y ago
  There are plenty of people of poor and ailing health, who don’t even have an option to do that, because they are paying high rents due to policies that protect homeowners’ profit. I don’t want to kick anyone out of the area, but I don’t think people who made a million of dollars (in the example above) are the ones who need the protection the most.
  - eanzenberg 8y ago
    Consider many homeless move here (SF) because of how lucrative panhandling is, along with other services. Numerous elderly have trouble moving due to their poor health. Forcing them to sell is akin to an early death sentence.
    - xyzzyz 8y ago
      They can mortgage their houses to pay the property tax. Having >$1M of accumulated wealth can help with many problems, you know. I’m not sure why you keep talking about homeless though.
- toasterlovin 8y ago
  If the choice is between the older generation having to relocate and young people trying to start families having to relocate, I am very much of the opinion that the older folks should take one for the team.

JamesBarney 8y ago

I'm in Texas where property taxes are ~3%. We just calculate that as part of the owning the home. Right now my mortgage and property taxes are the same. The way I look at it, if you can't afford the taxes you can't afford house.

imh 8y ago
If your property taxes were 10x what they were 20 years ago, would you still be able to afford it? Rr if they 10x in the next 20 years? That's what happened to the first San Francisco home I looked up on redfin to ballpark figures for.
- landryraccoon 8y ago
  You're pointing out another really bad side effect of Prop 13. Local communities have less tax incentive to allow higher density, since property taxes are capped. On the other hand, they are strongly incentivized to overbuild office space and retail, since they can increase sales taxes. In other words, if Prop 13 were repealed, communities would have more reason to allow housing construction (since the resulting housing could be taxed more). The result of your policy is not only increased cost of housing and underdevelopment, but higher sales taxes as well. If California had a more healthy proportion of property taxes, then sales taxes wouldn't be forced up to nearly 10% to fund government.
  - toast0 8y ago
    If you turn a single family home into 10 condos, you'll probably get a bigger combined assessment, and also more frequent turnover. Prop 13 actually would encourage this. If your turn it into apartments though, you've probably eliminated turnover, since it's much easier to own apartments through corporate forms that won't trigger a reassessment.
- JamesBarney 8y ago
  No but I'd be 3 million dollars richer, which is a fair trade off.

bryanlarsen 8y ago

"I'd imagine a ton of the people who bought at $500k can't afford $1600/mo on top of their mortgages." If you have $1M in capital in your $1.5M house, banks will be begging you to take out a reverse mortgage to pay your taxes. It just means that your heirs will get a slightly smaller windfall from your death rather than the full $1M.

opportune 8y ago

Yeah but it’s extremely unfair to young people who want to buy homes and don’t have luck of coming from a family with a house locked into a low tax rate. Your “stabilization” is everyone else’s inability to buy a house None of this would be a problem if the proposition had been sane. They could have just allowed primary home owners over a certain age (59.5, 65, etc) to have locked-in property taxes. The bullshit is that the “stabilization” applies to corporations with indefinite lifespans, and that the tax rates can be inherited. By corporations we’re not just talking big, actual business like Google. The way the proposition works incentivizes real estate funds to simply buy all the land they can as soon as possible to lock in a low rate that can be maintained indefinitely. This brings housing prices further up and disincentivizes actual land ownership over the long term (it makes it cheaper to rent from a group that structurally locked in a stupid low property tax rate). It’s such a stupid fucking law. Clearly nobody bothered to think of the long term consequences

wedn3sday 8y ago
I disagree, I think large groups of highly paid lawyers spent a great deal of time looking at the long term consequences and got the legislature to do exactly what their CEOs wanted.
- opportune 8y ago
  Proposition 13 passed by referendum. However I do agree with the general sentiment: it was probably easy for interest groups to rally behind senior citizens to their own benefits

southphillyman 8y ago

This is basically how gentrification pushes long time residents out (as I understand it). I experienced the shock of this first hand recently as my taxes increased by $1500+ in a single year after a recent reassessment in my city. The prop 13 issue seems pretty nuanced but a component of it is certainly helpful to low income long time residents.

toasterlovin 8y ago
Increases in property taxes are, by definition, subsidized by an proportional increase in wealth.